From the September post, With that said, the dollar's role is the dominant factor in the FX markets as expectations pertaining to the path of Fed policy and by extension real interest rate differentials both influence proceedings globally. As markets begin to strongly anticipate at least one rate hike in the final months of 2016, it may be worth revisiting the price action in the US treasury bond and FX markets that occurred prior to the December 2015 hike. By October 2015, treasury bonds began to sell off violently as the dollar started to surge against a broad range of currencies. Although the dollar and the treasury rate rise eventually did reverse while risk assets bounced back for much of 2016 (see February , May , May market commentaries), as mentioned too many times already (apologies) the troubling deceleration in NGDP and RGDP has not.